PROMISSORY
NOTE SECURED BY DEEDS OF TRUST


 





	
        $7,570,000.00
	Texas
		
        June 12, 2014



 


FOR VALUE RECEIVED,
the undersigned (“Borrower”) promises to pay to SILVERGATE BANK, a California corporation (“Lender”),
or order, during regular business hours at Silvergate Bank, 4275 Executive Square, Suite 800, La Jolla, California 92037-1492,
Attention: Commercial Lending Department, or at such other place as Lender may from time to time designate by written notice to
Borrower, with sufficient information to identify the source and application of such payment, the sum of up to Seven Million Five
Hundred Seventy Thousand Dollars ($7,570,000.00), together with interest on the balance of outstanding principal from the disbursement
dates thereof at the per annum rate set forth below. All calculations of interest hereunder shall be computed on the basis of a
360 day year for the actual number of days elapsed.


 


1.
Interest Rate. The unpaid principal balance under this Note shall bear interest at the rate (the “Contract
Rate”) equal to the lesser of (i) the maximum lawful interest rate or (ii) one percentage (1.00%) points over the “PRIME
RATE” as published in The Money Rates column of The Wall Street Journal from time to time. Adjustments to the Contract Rate
shall be made on a daily basis (with reference to the PRIME RATE most recently published in The Wall Street Journal on such day
or if The Wall Street Journal is not published on such date then the next earliest date upon which The Wall Street Journal is
published). If more than one “Prime Rate” is published in The Wall Street Journal for a day, the highest of such “Prime
Rates” shall be used. In the event that The Wall Street Journal is no longer published or ceases to publish the “Prime
Rate”, Lender may substitute another reasonable publication publishing the “Prime Rate”. In the event that “Prime
Rates” are no longer generally published or are limited, regulated or administered by a governmental or quasi-governmental
body, Lender may substitute another rate approximating the “Prime Rate” in its reasonable discretion (and which substitute
rate may be reasonably adjusted by Lender to the effect that such substitute rate will provide for an interest rate equivalent
to the Contract Rate which would have been effective if the “Prime Rate” were published). Notwithstanding the above
provisions, in no event may the Contract Rate be less than four and one-quarter percent (4.25%) per annum.


 


2.
Monthly Payments of Principal and Interest.


 


2.1
First Month. Commencing with the date of the initial disbursement of funds through and including July 4,
2014, in which such disbursement occurs, interest only shall be payable in advance on the date of this Note at the Contract Rate.
Interest for such partial month shall be computed on the basis of a 360-day year and shall be equal to the sum of a per diem interest
charge (for each day the principal balance hereof is outstanding during such partial month) equal to the product of (a) 1/360
and (b) the Contract Rate and (c) the outstanding principal balance hereunder for the day in question.


 






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2.2
Interest Only Monthly Payments. Commencing on August 5, 2014 and continuing
on the fifth day of each calendar month through and including July 5, 2016, Borrower shall pay interest in arrears for the prior
calendar month.


 


2.3
Monthly Payments. Commencing on August 5, 2016 and continuing on the fifth day of each of the next calendar
months thereafter through and including June 5, 2019, Borrower shall pay to Lender monthly payments of principal and interest
in an amount equal to the amount which would be sufficient to amortize the outstanding principal balance under this Note (as of
the date of such payment) at the then effective Contract Rate over the then remaining portion of an amortization period commencing
on July 5, 2016 and ending on July 4, 2041.


 


3.
Maturity Date. The entire balance of principal and accrued interest and other amounts then outstanding on
this Note are due and payable on July 5, 2019 (the “Maturity Date”). Borrower acknowledges that such balance
will not equal the regular monthly payment specified in Section 2.


 


4. Application
of Payments. Each payment hereunder shall be applied when received first to the payment of accrued interest
on the principal balance hereof from time to time remaining unpaid and then to reduce principal and then to amounts payable,
if any, into escrow accounts payable under the Loan Documents for taxes or insurance and then to any unpaid “Past Due
Charge” (as defined below); provided, however, upon the occurrence of an “Event of Default” (as defined
below), payments may be applied to any amounts secured by any of the “Deeds of Trust” (as defined below) in such
order and amounts as is designated by Lender in its sole and absolute discretion. No such application by Lender shall
constitute a cure or waiver of any default by Borrower under the applicable Deed of Trust or under this Note. Borrower hereby
waives any rights and benefits, if any, that may arise under or by virtue of California Civil Code Section 2822(a).
Without limitation of the foregoing, in the event of any partial payment hereunder, Lender shall have the sole right and
authority to determine which portion of the indebtedness evidenced hereby any partial payment may be applied against, if any;
provided that, nothing in the foregoing shall impose upon Lender any duty or obligation to accept or apply any partial
payment received by Lender hereunder or under the applicable Deed of Trust.


 


5. Default;
Acceleration. This Note is secured by those certain Deeds of Trust, Assignments of Leases and Rents, Security
Agreements and Fixture Filings of even date herewith by Borrower for the benefit of Lender (individually, a “Deed of
Trust”, and collectively, the “Deeds of Trusts”). Upon the occurrence and during the continuance
of an “Event of Default” (as defined in any of the Deeds of Trust), then, or at any time thereafter, the
whole of the unpaid principal hereof, together with accrued and outstanding interest and all other sums required to be paid
under this Note or the Deeds of Trust (including the prepayment premium hereinafter described) shall, at the election of
Lender and with prior notice of such election, become due and payable. Lender’s election may be exercised at any time
after any such event, and the acceptance of one or more payments hereon from any person thereafter shall not constitute a
waiver of Lender’s election, or of its option to make such election.


 






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6.
Past Due Charge and Past Due Interest Rate. Borrower recognizes and acknowledges that any default on any
payment, or portion thereof, due hereunder or to be made under any of the Deeds of Trust, will result in losses and additional
expenses to Lender in servicing the indebtedness evidenced hereby, and in losses due to Lender’s loss of the use of funds
not timely received. Borrower further acknowledges and agrees that in the event of any such default, Lender would be entitled
to damages for the detriment proximately caused thereby, but that it would be extremely difficult and impracticable to ascertain
the extent of or compute such damages. Therefore, if for any reason Borrower fails to pay any interest or principal required to
be paid under this Note, including any payment due at maturity or upon acceleration, or fails to pay any amounts due under any
of the Deeds of Trust, within ten (10) days of when due, Borrower shall pay to Lender, in addition to any such delinquent payment,
an amount equal to five percent (5%) of such delinquent payment (“Past Due Charge”). In addition,
upon the Maturity Date or upon the occurrence and during the continuance of an Event of Default (or upon any acceleration), interest
shall accrue hereunder at the “Past Due Rate” (as defined below). Borrower acknowledges that the Past Due Charge and
interest at the Past Due Rate agreed to hereunder represent the reasonable estimate of those damages which would be incurred by
Lender, and a fair return to Lender for the loss of the use of the funds not timely received from Borrower on account of a default
by Borrower as herein specified, established by Borrower and Lender through good faith consideration of the facts and circumstances
surrounding the transaction contemplated under this Note as of the date hereof, but that such Past Due Charge and interest at
the Past Due Rate are in addition to, and not in lieu of, any other right or remedy available to Lender. If any applicable law
proscribes the imposition of a past due charge in the amount of the Past Due Charge herein specified, or limits the rate of the
additional interest that may be charged to a rate less than the Past Due Rate herein specified, then the maximum charge or rate
permitted by such law shall be charged by Lender for purposes of this Section. As used herein, the “Past Due Rate”
shall be equal to the lesser of (i) six (6) percentage points over the Contract Rate, or (ii) the maximum rate of interest
permitted to be charged by applicable laws or regulation governing this Note until paid, such additional interest to be compounded
annually.


 


7.
Prepayment.


 


7.1 Borrower shall
have no right to prepay any principal of this Note except that, so long as no default or Event of Default exists under this Note
or any of the Deeds of Trust as of the date of such prepayment by Borrower, Borrower will have the privilege, to prepay the principal
of this Note (in whole only and not in part) upon at least thirty (30) but not more than sixty (60) days advance written notice
and subject to the following terms and conditions:


 


A. Premium.
Concurrently with such prepayment, Borrower shall pay all accrued and unpaid interest under this Note (whether or not then
due), all amounts then due under this Note or each of the Deeds of Trust and a prepayment premium equal to the following:


 


		(1)	A prepayment premium equal to three percent (3%) of the amount prepaid for a prepayment on or before
July 5, 2016; with no prepayment premium thereafter.



 






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B. EXCLUSIVE
RIGHTS. BORROWER ACKNOWLEDGES AND AGREES THAT BORROWER HAS NO RIGHTS OF PREPAYMENT OF THIS NOTE, EXCEPT AS PROVIDED ABOVE;
AND BORROWER FURTHER AGREES THAT, IF THE MATURITY OF THIS NOTE IS ACCELERATED BY LENDER BY REASON OF BORROWER’S DEFAULT AND
BORROWER OR ANY THIRD PERSON THEREAFTER SEEKS TO PAY SUCH ACCELERATED INDEBTEDNESS OR PURCHASE ANY OR ALL THE PROPERTIES (INDIVIDUALLY,
A “PROPERTY”, AND COLLECTIVELY, THE “PROPERTIES”) ENCUMBERED BY THE DEEDS OF TRUST SECURING
THIS NOTE AT FORECLOSURE SALE (WHETHER JUDICIAL OR BY THE TRUSTEE UNDER THE DEEDS OF TRUST), SUCH PAYOFF OR PURCHASE SHALL CONSTITUTE
A PREPAYMENT OF PRINCIPAL HEREUNDER AND A PREMIUM SHALL BE PAYABLE IN AN AMOUNT WHICH SHALL BE COMPUTED PURSUANT TO THIS SECTION 7
(INCLUDING THE PREPAYMENT PREMIUM).


 


8.
Costs. Borrower promises to pay to Lender, within five (5) business days after written notice from Lender,
all out-of-pocket costs, expenses, disbursements, property taxes, escrow fees, title charges and legal fees and expenses actually
incurred by Lender or its counsel (which must be reasonable provided no Event of Default has occurred and is existing) in the
negotiation, funding, enforcement or attempted enforcement, by foreclosure or otherwise, of this Note or any of the Deeds of Trust.
Without limitation on the foregoing, Borrower agrees to pay all out-of-pocket costs of collection, including attorneys’
fees and costs (whether or not for salaried attorneys regularly employed by Lender) and all costs of any action or proceeding
(including any bankruptcy proceeding or any non-judicial foreclosure or private sale) actually incurred by Lender, in the event
any payment is not paid when due, or in case it becomes necessary to enforce any other obligation of Borrower hereunder or to
protect the security for the indebtedness evidenced hereby, or for the foreclosure by Lender of any of the Deeds of Trust, or
in the event Lender is made a party to any litigation because of the existence of the indebtedness evidenced by this Note, or
because of the existence of any of the Deeds of Trust. All such costs are secured by the Deeds of Trust. The obligation of Borrower
to repay all such out-of-pocket costs and any other advances by Lender are secured the Deeds of Trust and shall be deemed to be
evidenced by this Note and shall accrue interest at the Contract Rate or the Past Due Rate, whichever is then applicable.


 


9. Waivers.
Borrower hereby waives diligence, presentment, protest and demand, notice of protest, of demand, of nonpayment, of dishonor
and of maturity and agrees that time is of the essence of every provision hereof; and further agrees that any such renewal,
extension or modification, or the release or substitution of any person or security for the indebtedness evidenced hereby,
shall not affect the liability of any of such parties for the indebtedness evidenced by this Note or the obligations under
any of the Deeds of Trust. Any such renewals, extensions, modifications, releases or substitutions may be made without notice
to any of such parties.


 


10. Remedies
Cumulative. The rights and remedies of Lender as provided in this Note and in each of the Deeds of Trust shall be
cumulative and concurrent and may be pursued singly, successively or together against Borrower, any of the Properties, or any
other persons or entities who are, or may become liable for all or any part of this indebtedness, and any other funds,
property or security held by Lender for the payment hereof, or otherwise, at the sole discretion of Lender. Failure to
exercise any such right or remedy shall in no event be construed as a waiver or release of such rights or remedies, or the
right to exercise them at any later time. The right, if any, of Borrower, and all other persons or entities, who are, or may
become, liable for this indebtedness, to plead any and all statutes of limitation as a defense is expressly waived by each
and all of such parties to the full extent permissible by law.


 






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11. Deeds
of Trust Provisions Regarding Transfers; Successors. Each of the Deeds of Trust securing this Note contains
provisions for the acceleration of the indebtedness evidenced hereby upon a “Transfer” (as therein defined).
Subject to the limitations on Transfer specified in each of the Deeds of Trust, the provisions hereof shall be binding on the
heirs, legal representatives, successors and assigns of Borrower and shall inure to the benefit of Lender and the successors
and assigns of Lender.


 


12. Partial
Release. Lender shall consent to causing a release from the lien of the applicable Deed
of Trust any applicable Property, such Property to be released, the “Released Property”,
but only upon the satisfaction of all of the following conditions:


 


a. Lender shall
have received from Borrower at least thirty (30) days' prior written notice of the date proposed for such release (the
“Release Date”) and the identification of the Released Property;


 


b. No Event of
Default in any of the Deeds of Trust shall have occurred and be continuing as of the date of such notice and the Release Date
and no event or condition shall exist that, with the passage of time or giving of notice, would constitute an Event of
Default in any of the Deeds of Trust;


 


c. The release
shall occur contemporaneously with the sale of the Released Property pursuant to an arm's-length, bona fide contract to a
person who is not an affiliate of Borrower or any person or entity with any interest in Borrower, whether direct or
indirect;


 


d. Borrower shall
pay to Lender on the Release Date an amount equal to the “Release Price” amount as indicated for such Released Property
on Exhibit “B” attached to this Note (such greater amount, the “Release Price”). The Release Price
shall be applied to the Loan in such order as determined by Lender, including the applicable prepayment premium;


 


e. Borrower shall
have provided Lender with evidence reasonably acceptable to Lender that the Released Property has been formally designated as a
distinct tax lot separate from the remaining Properties;


 


f. Borrower shall
have provided Lender with evidence reasonably acceptable to Lender that the Released Property and the remaining portion of the
Properties shall be legal lots or parcels in material compliance with the all Texas subdivision acts and local ordinances thereunder
and that the remaining portion of the Property has adequate ingress and egress;


 


g. If requested by
Lender, Borrower, at its sole cost and expense, shall have delivered to Lender a T-38 endorsement (or comparable endorsement) to
the mortgagee policy of title insurance delivered to Lender on the date hereof in connection with the Deeds of Trust insuring that,
after giving effect to such release, such title policy coverage has not been terminated or reduced by such releases; and


 






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h. Borrower shall
have paid all of Lender's reasonable out-of-pocket costs and expenses actually incurred by Lender, including, without limitation,
attorneys' fees and expenses, in connection with the release of the Released Property.


 


Upon payment of the Release
Price and the satisfaction of the other conditions set forth in this Section 12 for the release of the Released Property, the security
interests and liens of Lender under the applicable Deed of Trust shall be released from the Released Property, and Lender will
execute and deliver any agreements reasonably requested by Borrower to release and terminate the lien of the applicable Deed of
Trust as to the Released Property; provided, however, that such release and termination shall be without recourse
to Lender and made without any representation or warranty. Upon the release and termination of Lender's security interests and
liens under the applicable Deed of Trust and the other Loan Documents relating to the Released Property, all references in the
applicable Deed of Trust and the other Loan Documents relating to the Released Property shall be deemed deleted, except as otherwise
provided herein with respect to indemnities.


 


13.
Miscellaneous.


 


13.1 Manner
of Payment; No Offsets. All payments due hereunder shall be made in lawful money of the United States of
America. Such payments shall be made by check or, upon maturity and otherwise at the option of Lender, by transferring the
payment in federal or immediately available funds by bank wire or interbank transfer for the account of Lender without
presentment or surrender of this Note, provided; however, that any payment of principal or interest received after 5:00 p.m.
Pacific time shall be deemed to have been received by Lender on the next business day and shall bear interest accordingly.
All sums due hereunder shall be payable without offset, demand, abatement or counter-claim of any kind or nature whatsoever,
all of which are hereby waived by Borrower.


 


13.2 Fee
for Statement. For any statement regarding the obligations evidenced hereby to be furnished by
Lender, Borrower shall pay the fee then charged by Lender therefor, not to exceed, however, the maximum fee, if any, allowed
by law to be charged by Lender at the time such statement is requested.


 


13.3 No
Amendment or Waiver Except in Writing. This Note may be amended or modified only by a writing duly executed by
Borrower and Lender, which expressly refers to this Note and the intent of the parties so to amend this Note. No provision of
this Note will be deemed waived by Lender, unless waived in a writing executed by Lender, which expressly refers to this
Note, and no such waiver shall be implied from any act or conduct of Lender, or any omission by Lender to take action with
respect to any provision of this Note or any of the Deeds of Trust. No such express written waiver shall affect any other
provision of this Note, or cover any default or time period or event, other than the matter as to which an express written
waiver has been given. Without limitation, acceptance of any partial payment shall not constitute a waiver of any of
Lender’s rights, including the right to insist on immediate payment of all amounts due and payable.


 






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13.4 No
Intent of Usury. None of the terms and provisions contained in this Note, or in any of the Deeds of Trust, or in
other documents or instruments related hereto, shall ever be construed to create a contract for the use, forbearance or
detention of money requiring payment of interest or any other consideration that constitutes interest under applicable law,
as the case may be, at a rate in excess of the maximum interest permitted to be charged by applicable laws or regulation
governing this Note (“Usury Laws”). Borrower shall never be required to pay interest or any other
consideration that constitutes interest under applicable law, as the case may be, on this Note in excess of the maximum
interest that may be lawfully charged under such Usury Laws, as made applicable by the final judgment of a court of competent
jurisdiction, and the provisions of this Section shall control over all other provisions hereof and of any other instrument
executed in connection herewith or executed to secure the indebtedness evidenced hereby, which may be in apparent conflict
with this Section. If Lender collects monies which are deemed to constitute interest which would otherwise increase the
effective interest rate on this Note to a rate in excess of that permitted to be charged by such Usury Laws, all such sums
deemed to constitute interest in excess of the maximum rate shall, at the option of Lender, either be credited to the payment
of principal or returned to Borrower.


 


13.5 Governing
Law. This Note shall be governed by and construed and enforced in accordance with the laws of the State of Texas
(without regard to conflicts of laws), except where federal law is applicable (including, without limitation, any applicable
federal usury ceiling or other federal law preempting state usury laws).


 


13.6 Certain
Rules of Construction. The headings of each Section of this Note are for convenience only and do not define or limit
any provision of this Note. The provisions of this Note shall be construed as a whole according to their common meaning, not
strictly for or against any party, or any person or entity, who is or may become liable for the payment of this Note, and to
achieve the objectives of the parties unconditionally to impose on Borrower the indebtedness evidenced by this Note. Whenever
the words “including”, “includes” or “include” are used in this Note (including any
Exhibit hereto), they shall be read non-exclusively as though the phrase “, without limitation,” immediately
followed the same.


 


13.7 Severability.
If any term of this Note, or the application thereof to any person or circumstances, shall be invalid or unenforceable, the
remainder of this Note, or the application of such term to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each term of this Note shall be valid and enforceable to the
fullest extent permitted by law.


 


13.8 Notices.
Any notice which a party is required or may desire to give the other shall be in writing and may be sent by personal
delivery or by mail (either [i] by United States registered or certified mail, return receipt requested, postage prepaid, or
[ii] by Federal Express or similar generally recognized overnight carrier regularly providing proof of delivery), addressed
as follows (subject to the right of a party to designate a different address for itself by notice similarly given at least
15 days in advance):


 






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To Lender:


 


Silvergate Bank


4275 Executive Square


Suite 800


La Jolla, California 92037-1492


Attention: Commercial Loan Department


 


To Borrower:


 


Reven Housing Texas, LLC


7911 Herschel Avenue


Suite 201


La Jolla, California 92037


Attention: Thad Meyer


 


Any notice so given by mail shall be deemed
to have been given as of the date of delivery (whether accepted or refused) established by U.S. Post Office return receipt or the
overnight carrier’s proof of delivery, as the case may be. Any such notice not so given shall be deemed given upon receipt
of the same by the party to whom the same is to be given.


 


14.
Lender Assignment. Lender may assign, sell or transfer at any time this Note (and any documents relating
thereto and any interest therein).


 


14. Addendum:
The provisions of Exhibit “A” attached to this Note are incorporated herein and made a part of this Note by
this reference.


 


TO THE MAXIMUM EXTENT
PERMITTED BY LAW, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE LOAN, OR ANY OTHER LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF BORROWER OR LENDER OR ANY EXERCISE
BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN ANY WAY RELATING TO THE LOAN OR ANY OF THE PROPERTIES OR
THIS NOTE. THIS WAIVER IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN TO BORROWER.


 






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IN WITNESS WHEREOF,
this Note is executed as of the date first written above.


 





	 	“BORROWER”	 
	 	 	 	 	 
	 	REVEN HOUSING TEXAS, LLC,	 
	 	a Delaware limited liability company	 
	 	 	 
	 	By:	Reven Housing REIT, Inc.,	 
	 	 	a Maryland corporation,	 
	 	 	its Sole Member	 
	 	 	 	 	 
	 	 	By:	/s/ Thad Meyer
	 	 	Name:	Thad Meyer	 
	 	 	Title:	Chief Financial Officer	 


 






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EXHIBIT “A”


 


ADDENDUM


 


The following provisions
are made a part of the Note to which this Addendum is attached:


 


1. Non-Recourse.


 


A. Except as
provided below, Borrower shall not be personally liable for amounts due under the “Loan Documents” (as defined in
each of the Deeds of Trust), other than under that certain Unsecured Environmental Indemnity of even date herewith by
Borrower in favor of Lender and under Section 6.20 of each of the Deeds of Trust for which Borrower shall be
personally liable. Borrower shall be personally liable to Lender for any deficiency, loss or damage suffered by Lender
because of: (1) Borrower's commission of a criminal act, (2) the failure to comply with provisions of the Loan
Documents prohibiting the sale, transfer or encumbrance of any of the Properties or any interest therein, or any other
collateral, or any direct or indirect ownership interest in Borrower, including, without limitation, upon the occurrence of
any Transfer; (3) physical waste to any of the Properties, whether permissive or otherwise, (4) any bankruptcy,
insolvency, liquidation, reorganization, creditor assignment or similar relief or proceeding relating to Borrower or any
“Additional Essential Party” (as defined in any of the Deeds of Trust), (5) the removal or disposal of any
personal property, improvements, or fixtures in violation of the terms of any of the Deeds of Trust or any of the Loan
Documents unless replaced by personal property of reasonably equivalent value, (6) the misapplication by Borrower or any
Additional Essential Party of any funds derived from any of the Properties, including security deposits, insurance
proceeds and condemnation awards; (7) theft, fraud, or misrepresentation by Borrower or any Additional Essential Party
made in or in connection with the Loan Documents or the Loan; (8) (i) Borrower’s collection of rents more than one
month in advance; or (ii) entering into or modifying leases, or receipt of monies by Borrower or any Additional Essential
Party in connection with the modification of any leases, provided that (ii) herein is in violation of any of the Deeds of
Trust or any of the other Loan Documents; (9) Borrower's failure to apply proceeds of rents or any other payments in
respect of the leases and other income of any of the Properties or any other collateral to the costs of maintenance and
operation of any of the Properties and to the payment of taxes, lien claims, insurance premiums, debt service and other
amounts due under the Loan Documents or failure to deliver to Lender rents or security deposits upon request after the
occurrence of an Event of Default but only to the extent such funds are or were in Borrower's possession or control
(including funds held by any management company); (10) the interference, whether direct or indirect, by Borrower or any
affiliate of Borrower with Lender's exercise of rights or remedies under the Loan Documents (including any foreclosure
action or sale), whether by making any motion, bringing any counterclaim, claiming any defense, seeking any injunction or
other restraint, commencing any action seeking to consolidate any such foreclosure or other enforcement with any other action
or otherwise (except this clause (10) shall not apply if Borrower or such affiliate successfully contests such enforcement
and obtains a final non-appealable order as to the same), and including reasonable out-of-pocket attorneys’ fees and
costs incurred by Lender in connection therewith; (11) Borrower's failure to maintain insurance as required by the Loan
Documents or to pay any taxes or assessments affecting any of the Properties, provided that Borrower has the necessary cash
flow from the Properties to pay such expenses, but there shall be liability under this clause (11) for failure to maintain
required insurance, even if there is insufficient cash flow unless Borrower provides Lender with thirty (30) days’
advance written notice of any cancellation or termination, provided that Borrower has the necessary cash flow from the
Properties to pay such expenses; (12) intentional damage or destruction to any of the Properties caused by the acts or
omissions of Borrower, its agents, employees, or contractors; (13) Borrower's failure to pay for any reasonable loss,
liability or expense (including reasonable out-of-pocket attorneys' fees and the reasonable out-of-pocket costs and expenses
of in-house counsel allocated by Lender) incurred by Lender arising out of any claim or allegation made by Borrower, its
successors or assigns, or any creditor of Borrower, that this Note or the transactions contemplated by the Loan Documents
establish a joint venture, partnership or other similar arrangement between Borrower and Lender; (14) a
“Transfer” (as defined in any of the Deeds of Trust), other than a “Permitted Transfer” (as defined
in the Loan Agreement) occurs without the prior written consent of Lender (in its sole and absolute discretion); and
(15) all actual out-of-pocket costs and expenses, including attorneys’ fees and costs, incurred by Lender in
collecting any amounts due under the Loan Documents.


 






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B. None of the
foregoing limitations on the personal liability of Borrower shall modify, diminish or discharge the personal liability of (i)
Borrower under the Unsecured Environmental Indemnity, or (ii) any guarantor under any guaranty. Nothing herein shall be
deemed to be a waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b) or any other provision
of the United States Bankruptcy Code, as such sections may be amended, or corresponding or superseding sections of the
Bankruptcy Amendments and Federal Judgeship Act of 1984, to file a claim for the full amount due to Lender under the Loan
Documents or to require that all collateral shall continue to secure the amounts due under the Loan Documents.
Notwithstanding anything to the contrary contained in any Loan Document, nothing shall be deemed in any way to impair, limit
or prejudice the rights of Lender: (A) in foreclosure proceedings or in any ancillary proceedings brought to facilitate
Lender's foreclosure on any of the Properties or any portion thereof; (B) to exercise any specific rights or remedies
afforded Lender under any other provisions of the Loan Documents or by law or in equity; (C) to recover from Borrower
the amount of any unpaid taxes, assessments, and/or utility charges affecting any of the Properties and to collect from
Borrower any sums expended by Lender in fulfilling the obligations of Borrower, as lessor, under any leases affecting any of
the Properties; and/or (D) to recover from Borrower all out-of-pocket legal fees and other expenses incurred by Lender
in enforcing any rights it may have under the Loan Documents following the occurrence and during the continuance of an Event
of Default.


 






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